Blockchain and the Law

Category Archives: Government

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Is Blockchain Technology Compatible with GDPR? French Data Protection Regulator Provides Guidance

Uncertainty regarding the compatibility of blockchain technology and the European Union’s General Data Protection Regulation (GDPR) has often been highlighted as a potential obstacle to the development and widespread implementation of blockchain systems involving personal data. To address tensions between blockchain technology and the GDPR, Commission Nationale de l’Informatique et des Libertés (CNIL), the French … Continue Reading

Ohio and California Join Other States in Passing Blockchain-Friendly Legislation

This past summer, Ohio adopted legislation (SB220) that primarily provides for a legal safe harbor from certain data-breach related tort claims to covered entities that implement a specified cybersecurity program that “reasonably conforms” to a recognized cybersecurity framework for the protection of personal information and “restricted information” or comply with certain industry-specific federal privacy laws. … Continue Reading

New York State Department of Financial Services Eases Backlog and Approves More BitLicense Applications

On June 14, 2018, the New York State Department of Financial Services (the “DFS”) announced that the agency granted a virtual currency license (or “BitLicense”) to bitcoin wallet and vault provider Xapo, Inc., and authorized the blockchain financial services company Paxos Trust Company LLC to expand their business to offer exchange and custodial services to … Continue Reading

SEC Director William Hinman: “Current offers and sales of Ether are not securities transactions”

At last week’s Yahoo! All Markets Summit in Palo Alto, SEC Division of Corporation Finance Director William Hinman delivered a speech sure to send shockwaves through the crypto world. Applying the Howey test (which sets forth the elements necessary for determining whether a transaction involves the offer or sale of an “investment contract” and thus, … Continue Reading

SEC Flexes Funny Bone in Fictional Token Offering

The Securities and Exchange Commission (the “SEC”) has taken to using humor and sarcasm to educate retail investors about the potential risks of purchasing tokens in initial coin offerings (“ICOs”). This week, the SEC issued a press release presenting “a hot investment opportunity.”  The release pointed to a website touting the HoweyCoin—a fictional crypto token … Continue Reading

Cryptoasset Exchanges Respond to New York Attorney General’s Virtual Markets Integrity Initiative

On April 17, 2018, the New York Attorney General’s Office (“OAG”) launched a Virtual Markets Integrity Initiative and sent letters to thirteen cryptoasset trading platforms requesting, through a questionnaire, disclosures on their operations, internal controls, and safeguards to protect customer assets.  The questionnaire focused on six major topic areas, including: 1) Ownership and Control, 2) … Continue Reading

When Filing Taxes, Don’t Forget Virtual Currency Income

In a March 23 news release, the IRS reminded taxpayers that income from virtual currency transactions must be reported on income tax returns, and that certain virtual currency transactions are taxable like any other property transactions. Taxpayers should note that despite the pseudo-anonymity of virtual currencies, the IRS has been able to successfully subpoena a … Continue Reading

SEC and CFTC Chairmen Testify before Senate on Cryptoasset Regulation

Last month, SEC chairman Jay Clayton and CFTC chairman Christopher Giancarlo testified before the Senate Banking Committee on their agencies’ regulatory efforts with respect to cryptoassets and ICOs. The written testimonies of chairmen Clayton and Giancarlo, as well as their verbal statements at the hearing itself, shed light on various issues including:  how tokens might … Continue Reading

New York State Department of Financial Services Issues Guidance to Virtual Currency Entities

On February 7, 2018, the New York State Department of Financial Services (“DFS”) issued guidance for all virtual currency entities licensed by New York State regarding the prevention of market manipulation, fraud, and other wrongdoing. According to DFS, New York has granted four licenses and two charters to virtual currency businesses to date. In its … Continue Reading

State-Level Legislation Anticipates Wide-Spread Business Use of Blockchain

On a daily basis, companies are announcing new developments on the adoption of blockchain in core business operations.  However, many of these use cases present unique legal issues.  In order to provide some clarity on some of these issues, and perhaps to offer a blockchain-friendly environment for the operation of blockchain companies, state legislatures around … Continue Reading

Colorado Senate Bill Proposes Utilizing Blockchain Technology to Improve State Government’s Operations and Cybersecurity

The Colorado Senate is considering a bill to utilize blockchain or other distributed ledger technology for a variety of purposes, including to improve the state government’s operations and cybersecurity. Senate Bill 18-086 (which was introduced on January 16, 2018) focuses on exploring a number of “transformative improvements” that distributed ledger technologies can offer to state … Continue Reading
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